CDR

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Felix VaksActuary, Office of the Chief ActuarySocial Security Administration

November 9, 2017

Disclaimer

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• The views presented here are mine and do not represent the Social Security Administration or the Office of the Chief Actuary within SSA.

CDR

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Continuing Disability Review

A Continuing Disability Review (CDR) is a routine medical review done by the Social Security Administration (SSA). CDRs are done to make sure that people receiving Social Security (OASDI) and Supplemental Security Income (SSI) disability benefits are still disabled and entitled to those benefits.

CDR is part of SSA’s Program Integrity

CDR Cost and Program Savings

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• We estimate that the CDRs will save a present value of more than ten times that amount in Federal benefits over the next 40 years.

• In 2018 SSA will spend around $900 Million to conduct nearly 900 thousand CDRs.

SSA Administered Programs

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• OASI: Old-Age and Survivors Insurance• DI: Disability Insurance• SSI: Supplemental Security Income

Supplemental Security Income (SSI) is a government program that is run by SSA that provides stipends to low-income and low assets people who are either aged 65 or older, blind, or disabled.

SSI and DI Disability

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Both SSI and DI determine disability the same way:• Disability for an adult is defined as the inability to engage in any SGA (Substantial Gainful

Activity) by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of at least 12 months.

SGA – Substantial Gainful Activity • a level of work activity and earnings for people

receiving disability benefits.

• In 2017 SGA is generally $1,170 a month

Continuing Disability Review

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By law SSA is required to review each case to determine if the individual is still eligible for benefits.

Person received benefits for several years. Is the individual still disabled?

Determine if there was any significant improvement in the disability.

CDR Projection Models

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1) How Many2) How Much

- CDRs are processed in each year- Is the Savings from Cessations due to a CDR

2 Questions

How Many CDRs

• Budget• DDS

How Much Savings

• Cost vs Savings• Appropriate Funds

Office of Chief Actuary – uses several models for:• OMB Budget• CDR Report

CDR

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1) SSI Only

My area of expertise is:

2) Medical CDR

What I am going to present will primarily deal with SSI Medical CDR.

CDR Process

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In 2017 there are over 6 million SSI recipients under 65 years old.

How often to do a CDR?

The frequency of review depends on the likelihood of medical improvement.

DDS determines a diary (category) of when the next CDR is due.

CDR Diaries

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DIARY

MIE

MIP

MINE

Definition

- Medical Improvement Expected

- Medical Improvement Possible

- Medical Improvement Not Expected

Next Due Date

- In 1 Year

- In 3 Years

- In 7 Years

| MIE – 1 Year | MIP – 3 Years | MINE – 7 Years |

Processed vs. Not Processed

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• Even those due for a CDR in a certain year cannot always be processed in that year.

• Those CDRs that are not processed that year are delayed to the following year.

• BACKLOG

Categories of SSI Reviews

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LBW Children AdultsAge 18 Redetermination

1) Low Birth Weights (LBW) - Children that are born prematurely or with low birth weight

2) Other Children - Children that are not low birth weight

3) Adults - Recipients that are over 18 years of age

Age 18 Redetermination

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Definition of Disability

Adult: physical or mental impairment that results in the inability to do any substantial gainful activity (SGA) (at least 12 months)

Child: physical or mental impairment that results in marked and severe functional limitation (at least 12 months)

Age 18 Illustration

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Child Adult

Age 18 Redetermination

Determining How Many CDRs Are There in Any Given Year

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We are going to go through the CDR process by each category and see how it flows.

LBW

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Did not Process CDR in that Year

Processed CDR in that Year

Postpone to Following Year

Backlog

LBW

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Processed CDR in that Year

MIE MIP MINECDR in 2017

Next CDR Due in 2018

Next CDR Due in 2020

Next CDR Due in 2024

Continuance Cessation

Done*Rediary

KIDS

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Did not Process CDR in that Year

Processed CDR in that Year

KIDS-Not Processed

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Current Age Less than 17

Current Age is 17

Backlog AGE 18 Redetermination

Following Year

KIDS

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Processed CDR in that YearContinuance Cessation

Done*Rediary

KIDS

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KIDS CDR

Rediary

2nd CDR

NO YES

AGE 18 Redet.

Turning Age 18 Before Diary is Due?

1st CDR

KIDS-Scenario 1

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MIE MIP MINECDR in 2017

Next CDR Due in 2018

Next CDR Due in 2020

Next CDR Due in 2024

Rediary

2017 9

YEAR of CDR

2018 10

2020 12

2024 16

AGE at CDR

Not going to turn Age 18 before any Diary is due.

KIDS-Scenario 2

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MIE MIP MINECDR in 2017

Next CDR Due in 2018

Next CDR Due in 2020

Next CDR Due in 2024

Rediary

2017 13

YEAR of CDR

2018 14

2020 16

2024 20

AGE at CDR

MINE diary would be due in 2022, two years earlier than its due date.

ADULT CDR

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• Over 1 Million Adults CDRs are processed every year.

• Total cost for Adults CDR would then be $1.7 Billion.

• Adult Cessation rate is around 5%

• 1.6 Million Adult CDR would not get a cessation• $1.6 Billion of spending would not result in a cessation

• Each full CDR costs around $1,000 to process.

• In 2016 there were 1.7 Million Adults CDR processed.

ADULT Mailers

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• In mid 1990’s SSA started a mailer system.

• Adults that have a high chance of medical improvement get a FMR (Full Medical Review).

• Adults that have a low chance of medical improvement get a mailer.

• Purpose was to save on administrative cost without losing efficiency in the program.

• Goal is to do a CDR on only the most likely cases of cessation.

Mailers Process

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• A mailer is sent out to be filled out by the recipient.

• Mailer contains 6 questions about the disability of the person.

• Based on the answers SSA determines if the individual needs a full medical review or defer individual’s diary until next CDR.

• If the person needs a full medical review after a mailer is processed he is referred by SSA as a “Do-CDR”

Mailer’s Profile Model

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• Based on different inputs the model determines if the individual has a “High”, “Medium”, and “Low” chance of cessation.

• Model has many inputs including age, how long they have been on SSI, whether they previously had a CDR and many more.

• The model is tested every year by having 60,000 individuals sampled from the DI and SSI population that is due for a CDR. Those individuals get a mailer and a FMR (regardless of profile scores) and results are compared to the model.

• To determine who gets a mailer, SSA developed a profile model.

• The inputs of every individual is updated and the profile is rescored at the beginning of every year.

Profile Score for Mailer

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• Profile score alone will not determine who gets a mailer.

• “High” chance of cessation is all relative.

• Not all “High” will be Full Medical Review (FMR) and not all “Low” will be Mailers.

• SSA uses a mixture of Profile score and Diary to determine who gets a Mailer or a FMR.

Mailers Administrative Savings

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• 1.7 Million Adults CDR were processed in 2016.

• Each full CDR costs around $1,000 to process• Each mailer costs around $20 to process

Using Mailers1.2 Million Mailers x $20 = $24 Million

• Out of those 1.7 million, 1.2 million were mailers.

Mailers process saved over $1 Billion.

Without Using Mailers1.2 Million FMR x $1,000 = $1.2 Billion

ADULT CDR PROCESS

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Full Medical Review (FMR)

Mailers Do-CDR

Adult in the CDR process can be in any of the three groups:

Immediately get a FMR

Immediately get a Mailer

Get a FMR after Mailer is returned and

processed

Adult CDR

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FMR Mailers

Do-CDRContinuance Cessation

Rediary

Deferral

Cessation RediaryContinuance

Rediary

Rediary Transitions

LBW

KIDS

KIDS Age 18 Redet.

FMR

Mailer

FMR

Mailer

Do-CDR

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Kids Rediary

MIE MIE MIP MINE

1st CDR 2nd CDR

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Kids Rediary

MIE MIE MIP MINE

1st CDR 2nd CDR

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MIP MIE MIP MINE

Kids Rediary

MIP MIE MIP MINE

1st CDR 2nd CDR

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MINE MIE MIP MINE

MIE MIE MIP MINE

Kids Rediary

MIE MIE MIP MINE

MIP MIE MIP MINE

MINE MIE MIP MINE

MIE

MIP

MINE

MIE MIP MINE3 x 3 Matrix1st CDR 2nd CDR

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Adults Rediary

High MIE

MIE MIP MINE

1st CDR

High

MIE MIP MINE MIE MIP MINE

Medium Low

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Adults Rediary

High MIE

MIE MIP MINE

1st CDR

High

MIE MIP MINE MIE MIP MINE

Medium Low

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High MIP

MIE MIP MINE MIE MIP MINE MIE MIP MINE

Adults Rediary

MIE MIP MINE

High

MIE MIP MINE MIE MIP MINE

Medium Low

MIEMIPMINEMIEMIPMINEMIEMIPMINE

High

Medium

Low

9 x 9 Matrix

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How many CDRs will be processed in 2021?

Year

2017

2018

2019

2020

2021

MIE

MIE

MIE

MIE

Variation 1

MIE

MIP

Variation 2

MIE

MIP

Variation 3

Rediaries

BacklogCDRs

Coming Due

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Other Factors in the Model

1) Attrition (due to death, too much income or resource etc.)

2) Cessations from CDR (by category)

3) Aging Out of CDR process

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AGEAge is an important factor in the CDR model.

• Children to Adult transition• Aging Out Adults• Assumptions

Assumptions• Setting assumptions by age• Applying the assumptions by age

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Assumptions with Age - Diaries

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0 10 20 30 40 50 60

PERC

ENT

OF

TOTA

L

AGE AS OF OCTOBER 2017

DIARIES AS PERCENT OF TOTAL IN EACH SINGLE YEAR OF AGE

MIEMIPMINE

Assumptions with Age - Profiles

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

18 23 28 33 38 43 48 53 58 63

PERC

ENT

OF

TOTA

L

AGE AS OF OCTOBER 2017

PROFILES AS PERCENT OF TOTAL IN EACH SINGLE YEAR OF AGE

HIMEDLOW

How Much - CDR Program Savings

Cessations• How many cessations• When are they final

Cessation

Done*

AppealClaimant has 60 days to appeal his/her denial of benefits.

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CDR Appeals ProcessThere are four level of appeals

• Reconsideration• Hearing by an administrative law judge• Review by the Appeals Council; and• Federal Court review

Recon ALJ Appeals Council

Federal Court

Initial Decision

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Ultimate Cessations and Timing of Cessation

Recon ALJ Appeals Council

Initial Decision

January 2017

May 2017

January 2018

January 2019

1,000 Cessations

800 Cessations

720 Cessations

700 Cessations

People in Cessation

Timing of Cessation

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Estimating the Savings

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• Present Value of Future Benefits• Determine how much benefit the individual would have

been paid in each year

• Take into account attrition and recidivismAttrition – person would die or lose eligibility for benefits even

without cessationRecidivism – person would reapply and receive benefits after cessation

• Savings accumulate over each year

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Monthly Number of Individuals Off the SSI Payment Rolls Attributable to Medical CDRs

Without Appeals Process (Initial Cessations)

Fiscal Year of Initial Decision

Fiscal Year of Federal Savings Totals

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2017 - 27

2017 1000 900 810 729 656 590 531 478 430 387 349 6,862

2018 1000 900 810 729 656 590 531 478 430 387 6,513

2019 1000 900 810 729 656 590 531 478 430 6,126

2020 1000 900 810 729 656 590 531 478 5,695

2021 1000 900 810 729 656 590 531 5,217

2022 1000 900 810 729 656 590 4,686

2023 1000 900 810 729 656 4,095

2024 1000 900 810 729 3,439

2025 1000 900 810 2,710

2026 1000 900 1,900

2027 1000 1,000

Totals

2017 - 27 1,000 1,900 2,710 3,439 4,095 4,686 5,217 5,695 6,126 6,513 6,862 48,243

11,000 -> 48,000

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Monthly Number of Individuals Off the SSI Payment Rolls Attributable to Medical CDRs

With Appeals Process (Ultimate Cessations)

Fiscal Year of Initial Decision

Fiscal Year of Federal Savings Totals

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2017 - 27

2017 333 600 840 756 680 612 551 496 446 402 362 6,079

2018 333 600 840 756 680 612 551 496 446 402 5,717

2019 333 600 840 756 680 612 551 496 446 5,316

2020 333 600 840 756 680 612 551 496 4,869

2021 333 600 840 756 680 612 551 4,373

2022 333 600 840 756 680 612 3,822

2023 333 600 840 756 680 3,210

2024 333 600 840 756 2,529

2025 333 600 840 1,773

2026 333 600 933

2027 333 333

Totals

2017 - 27 333 933 1,773 2,529 3,210 3,822 4,373 4,869 5,316 5,717 6,079 38,956

11,000 -> 39,000

Sum It All Up

How Many How MuchCDR Program

Savings

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Links

(2014) CDR Report - https://www.ssa.gov/legislation/other.html

(2017) SSI Report - https://www.ssa.gov/OACT/ssir/index.html

Thank you for listening

Questions?

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